China’s state energy group CNPC aims to produce 1.7 million metric tons of shale oil, or 12.4 million barrels next year at a pilot project in northwest Xinjiang region, state news agency Xinhua reported on Tuesday.

Jimsar shale gas project, located in the Junggar basin, is one of the country’s three shale oil pilot projects state oil companies are trying to develop. The other two are Gulong in northeast China and Jiyang in east China.

At Jimsar, CNPC has so far this year produced 1.011 million tons, or 7.4 million barrels of oil, according to Xinhua.

China is believed to hold massive amount of shale gas resources. Oil and gas-rich Xinjiang alone holds more than 3 billion tons.

Despite the huge reserves, shale oil remains among the geologically most challenging and costly types of oil to explore and produce.

China’s shale gas production hit a record last year at more than 4 million tons, or about 80,000 barrels per day, Xinhua said, which is roughly 2% of China’s total domestic oil output.
Source: Reuters (Reporting by Chen Aizhu, Editing by Tomasz Janowski)